Europe markets end mixed amid volatility

AFP

London

European stocks traded mixed yesterday following strong gains the previous day, while oil futures rose after sharp falls amid huge volatility across global markets ahead of the festive shutdown.

London’s benchmark FTSE 100 index climbed 1.23% to close at 6,545.27 points, but in Paris the CAC 40 slid 0.18% to 4,241.65 and in Frankfurt the DAX 30 shed 0.25% to 9,786.96.

Global stock markets had surged in a “Santa Claus rally” on Thursday as dealers welcomed the outcome of the US Federal Reserve meeting which signalled an interest rate increase was not imminent.

Asian markets continued the trend yesterday, with Tokyo jumping 2.39% by the close and Hong Kong up 1.25%.

The Bank of Japan yesterday struck a more upbeat view of the world’s number three economy, saying exports were showing signs of picking up while factory output has started to “bottom out”.

The comments came as policymakers wrapped up a two-day meeting where they held off fresh easing measures, after announcing in late October a huge expansion of the BoJ’s asset-buying programme.

“He left it late this year, but Santa finally provided a Christmas rally yesterday, after stability entered the previously volatile rouble and Brent Crude oil, and positivity from US and Japan led to worldwide rallies,” Connor Campbell, analyst at Spreadex trading group, said yesterday.

However in Europe yesterday “the reindeer got tired and Santa took a break from his rally,” said CMC Markets UK analyst Jasper Lawler.

He added that “after the strongest two-day action in years and no major catalyst for the next leg higher, shares were due a pullback.”

US stocks also had trouble keeping up the momentum yesterday.

The Dow Jones Industrial Average had crept up 0.04% to stand 17,784.97 points in midday trading

The broad-based S&P 500 added 0.24% to 2,066.28, and the tech-rich Nasdaq Composite Index rose 0.26% to 4,760.88.

In foreign exchange, the euro slid to $1.2233 from $1.2287 late in New York on Thursday.

Gold dipped to $1,195.50 an ounce from $1,199 Thursday on the London Bullion Market.

Brent North Sea crude for delivery in February climbed $1.42 to $60.69 a barrel and New York’s WTI contract for January jumped $2.12 to $56.23.

Those gains helped push oil company shares higher, a major reason London’s FTSE rose strongly.

Tullow Oil jumped 6.9% to finish at 424.2 pence, Royal Dutch Shell’s A-share climbed 3.1% to 739 pence and BP rose 2.6% to 413 pence.

Oil prices had skidded sharply lower in volatile trade Thursday, pushing the US benchmark futures contract to a new five-year low amid concerns about ample global supplies.

“We see a lot of volatility and this volatility seems bound to last until the end of the year, with not much happening, fundamentally,” said Carl Larry of Frost & Sullivan.

“It’s a lot of holiday trade now,” he said, with traders looking in the rearview mirror at important US macroeconomic events: the November jobs report last Friday and the Federal Reserve policy decision Wednesday.

Fed Chair Janet Yellen said the dramatic decline in global oil prices was good for the US economy, a net importer of oil, as consumers gain extra dollars to boost spending.

Oil prices have plunged from June levels above $100 a barrel, and Opec, the oil producers group that supplies about a third of the world’s crude oil, has refused to cut output.